On February 25, 2021, the Supreme Court of California issued an opinion in Donohue v. AMN Services, LLC[1], that may impact the way employers record and calculate the time taken by their employees for meal periods. The Court held unanimously that employers cannot engage in the practice of rounding time punches for meal periods. It also held that time records showing noncompliant meal periods raise a rebuttable presumption of meal period violations, including at the summary judgment stage.
California Law
Employers must generally provide employees with an uninterrupted 30-minute meal period that begins no later than the end of the fifth hour of work.[2] If an employer does not provide an employee with a compliant meal period (whether not provided at all, short, delayed, or interrupted) then for each workday a compliant meal period is not provided the employer must pay the employee one additional hour of pay at the employee's regular rate of compensation (sometimes referred to as “premium pay”). The additional hour of pay serves the dual purpose of compensating employees for their lost time and discouraging employers from infringing on employee meal periods.
Rounding and Meal Periods
In an effort to try to track employee work time, including meal periods, many employers use time keeping systems or software. Some of these systems round time punches by employees up or down for a specified increment of time. Because this method of calculating time is imprecise and could result in reduced meal period times, the Court in Donahue found that such rounding for meal periods was not consistent with the purposes of the Labor Code provisions providing for premium pay for non-compliant meal periods and is not an acceptable practice for calculating time for meal periods.
What the Donahue Decision Means for Employers
Meal break violations which are not properly compensated may subject employers to potential claims or lawsuits which can cost much more than a few minutes of pay in the end. Employers should review their time keeping practices and make sure they are compliant with the requirements established by Donahue and with California law and regulations in general.
Meal Period rounding practices should immediately be discontinued. Employers should update their systems / software to ensure compliance.
Rest Period rounding practices, if employees punch in and out for rest periods, should also be immediately discontinued. Although not specifically addressed by the Donahue Court, it did reaffirm that the infringements on employees’ daily ten-minute rest periods required by the Labor Code are scrupulously guarded against, violations of which could expose employers to liability.
Accurate Records should be maintained. California law does not require employers to police meal periods to ensure they are taken. But records showing noncompliant meal periods raise a presumption of meal period violations which must then be rebutted by presenting evidence that employees were either compensated or were provided compliant meal periods during which they chose to work. Employers should use a timekeeping system and/or acknowledgement forms from employees that confirm that employees are taking their meal and rest breaks on a daily basis or to the extent they are not, that it is documented as either a voluntary decision by the employee or if not voluntary, that the employee was properly compensated.
Reconsider Regular and Overtime rounding practices. If an employer is currently using time rounding for purposes of calculating regular or overtime, it should consider alternate methods. Although there is currently no prohibition on rounding for regular and overtime so long as the rounding policy is neutral on its face and as applied (does not over- or under-compensate the employee over time) the Court’s discussion in Donahue suggests that as technology continues to evolve allowing employers to track time more precisely, the practical advantages of rounding in general may diminish further and ultimately be an unacceptable practice in all contexts.
Consult an attorney to ensure your practices and policies are current and compliant. California employment law is complicated and it can be difficult for an employer to make sure it is doing everything it needs to do to stay current and compliant with California employment practices and an experienced attorney can help you do that.
Please feel free to contact us if you have any questions or would like further information.
[1] Donohue v. AMN Servs., LLC, 11 Cal. 5th 58, 481 P.3d 661 (2021)
[2] Another 30-minute meal period is required no later than the end of the tenth hour of work. (Lab. Code, § 226.7(c), 512(a); Industrial Welfare Commission (IWC) wage orders; Donohue, supra.
Disclaimer: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.